Bitcoin is the currency of the Internet: a distributed, worldwide, decentralized digital money. Unlike traditional currencies such as dollars, bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. As such, it is more resistant to wild inflation and corrupt banks. With Bitcoin, you can be your own bank.

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We previously collected donations to fund Bitcoin advertising efforts, but we no longer accept donations. The funds already donated will be spent on some sort of advertising, as intended. As of now, 10.35799117 BTC was spent out of 22.51357574. If you have ideas for the remaining BTC, see here for more info.

Bitcoin is in desperate need of a mechanism to profit from downside action (RIP Bitcoincica) to keep the price stable. Until the next Bitcoinica arrives we are likely going to see a much more volatile price in Bitcoins for the foreseeable future (meaning it is just as likely to go to 15 as 5 in the near term).

My advice is is always that I don't have any idea if it is going up or down, but I still believe in bitcoin and other alternative (crypto)currencies in long-term. Bitcoin being currently the strongest candidate.

This is the best answer. Do not listen to anyone who tries to convince you that Bitcoin is some all powerful currency that's gaining massive momentum and is going to take over the world. It's a semi-popular alternative online currency with a lot of enemies. People tend to get too invested and excited about bitcoin and their comments are usually fuelled by greed and the hope for their investments to gain popularity, so they try to hype bitcoin at every turn. I tried to tell people last summer when they were dumping their life savings into bitcoin when it peaked, but some people just don't listen and I saw people lose insane amounts of money when it plummeted.

Do not listen to anyone who tries to convince you that Bitcoin is doomed to failure and interest is collapsing. It's a marginally popular form of money which has more room to grow than shrink. People tend to get too invested and excited about failure and their comments are usually fueled by greed and the hope for their investments to gain popularity, so they try to hype collapse at every turn. I tried to tell people last November when they were dumping their Bitcoin holdings as it bottomed, but some people just don't listen, and I saw people lose insane amounts of money when it rose.

tl;dr Who knows? There seems to be growing interest from nearly every avenue, so the downside looks to be limited.

Exactly. I've just transferred £200 to MtGox, and my wife £100 (I'm taking care of it for her). From what I've read, I have at least some confidence in Bitcoin long-term... it's a definite gamble, but we can afford to lose that money, so if the price crashed down to basically nothing then it would be fricking annoying but wouldn't affect us in any real way.

On the other hand, if it keeps rising, we could double / triple / octuple our investment.

It's a pretty big risk, but it's exciting, and I have some faith in the long-term potential of Bitcoin.

The only problem now is when to place a buy order for BTC. The £300 is just sitting in my account. I've been watching the market over the past week or two (even have a MtGox price widget on my Android phone) and there never seems to be a good time to buy.

As this is an experiment and we're investing for the (potential, hopeful) long-term pay-off, perhaps just buying now would be wise. But the price has been so flat for the past few days that it's always tempting to wait for a bit of a dip...

Given that this is a reasonably high-risk £300 experiment that we're half-expecting to lose and half-expecting to see some return on (and that we're going to do anyway) do you think that (a) it's a good idea, and (b) should we just buy now? Like I said, losing the money isn't that big a deal; we earn decent salaries and it wouldn't impact our ability to pay rent / but shiny things, etc.

Just seemed like an admittedly high-risk way of potentially making a lot of money (long-term).

Suppose the bitcoin is likely to go up. There are a bunch of bitcoin traders that are trying to make money, so they'll likely notice this and start buying. All that buying drives the price up, and this continues until the current price is the same as what the traders think the price is going to eventually end up being.

Similarly, if the bitcoin is likely to go down, the traders will start selling, causing the price to drop.

In summary, assuming there are enough intelligent traders trying to make money at bitcoin, the current price is usually the same as the expected future price, and buying in (or cashing out) is fundamentally a gamble rather than an investment.

tl;dr: There's no such thing as a good investment, because someone else got there first.

The first major exception to this is if you think you can out-research the other traders/investors. If you can make a prediction about bitcoin's future that the other people in the market haven't already also made, then you can make money off that information.

The second major exception is if you're in an unusual situation where a simple gamble could be a good idea. For example, if you need $10,000 for a life-saving medical procedure, then you may not care very much about the difference between having $0 and having $9000, but you care enormously about the difference between $9000 and $10,000. In that case, if you have $9000 already, taking a risk to try to get the last thousand might be your best strategy.

I think that I'm going to treat this as a gamble and buy real soon now (my wife even said that she's not necessarily expecting to see the money again... she understands that it's pretty high risk).

However, I just used ~£40 worth of BTC to buy "miscellaneous goods", so have transferred another £40 to my MtGox account. I'll place a proper buy order for the entire £300 when that money reaches my account... although ideally I'd like the exchange rate to dip somewhere around $10.50. There was a weird jump in value today - not really sure what that's about...

If the Butterfly Labs ASICs are supply constrained (which seems likely), then most newly generated bitcoins will go to the people that manage to receive them. This may constrict supply for the rest of us chumps and cause the price to go up!